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April 9, 2007
Hearing to Focus on Responses to Rising Mortgage
Foreclosures
House Financial Services
Committee Chairman Barney Frank (D-Mass.) announced Friday that the
committee has scheduled a hearing on April 17 to explore possible
responses to recent increases in home mortgage foreclosure rates,
particularly in the 'subprime' mortgage market. Witnesses
tentatively scheduled to testify will be representatives from Fannie
Mae, Freddie Mac, the Federal Housing Administration, the mortgage
industry and consumer organizations.
href='http://www.house.gov/apps/list/hearing/financialsvcs_dem/hr041707.shtml'>Full
witness list to be announced .
name='2'>Hearings Set for
w:st='on'>
size='3'>Portland
size='3'>Archdiocese Reorganization Plan
Hearings are scheduled to begin
Tuesday on the Archdiocese of Portland's (Ore.) bankruptcy
reorganization plan that could finally spell out just how much the
archdiocese will have to pay to settle the 386 clergy sexual abuse
claims that have been filed since 1986, the Associated Press reported
yesterday. At least 169 of those claims have been resolved since the
archdiocese became the first Roman Catholic diocese in the nation to
file for chapter 11, but those claims won't be paid unless the
reorganization plan is approved. No participant in the litigation is
allowed to discuss the case publicly because of a gag order imposed by
U.S. District Judge Michael Hogan and Lane County Circuit Judge Lyle
Velure, who mediated scores of settlements and helped craft the proposed
reorganization plan late last year. If approved, the plan will pay all
current claimants who have settled their cases and will set up a $20
million fund for claims that could be filed during the next 22 years.
Additionally, the plan will not require any property of the
archdiocese's 124 parishes to be sold to pay claims.
href='http://www.theolympian.com/112/story/78307.html'>Read
more.
New
Century Unloads Unfunded Loans
New Century Financial Corp.
said in documents filed with the Securities and Exchange Commission that
it has unloaded all of the mortgage loans it originated but had yet to
fund, the Associated Press reported yesterday. The Irvine, Calif.-based
company, which filed for chapter 11 last week, said in the regulatory
filing Friday that as of April 3, it has disposed of all the loans in
its inventory. The company said that the loans were ready for funding,
or in other stages of processing. New Century worked with state
regulators to get the loans returned to the mortgage brokers who
originally submitted the loan applications so borrowers could apply for
loans from other lenders. The company also reached out to other lenders
to transfer loans sold through its retail mortgage division.
href='http://www.nytimes.com/aponline/business/AP-New-Century-Financial-Loans.html?pagewanted=print'>Read
more .
name='4'>Advanced Marketing Seeks Extension to File Chapter 11
plan
Bankrupt book seller
Advanced Marketing Services Inc. is asking a bankruptcy court for an
extension to file its chapter 11 plan, Dow Jones Newswires reported on
Friday. The company's exclusivity period for filing a reorganization
plan expires on April 28, and Advanced Marketing is now asking to have
until Aug. 10 to work out additional plan details. The San Diego-based
company filed for bankruptcy in
w:st='on'>
size='3'>Delaware
29, 2006, hoping to reorganize and emerge from chapter 11 as a
standalone company. Secured creditor Wells Fargo Foothill Inc., however,
refused to fund a long-running bankruptcy, and worried publishers quit
supplying the business. By March, Advanced Marketing had sold its
wholesale operation, which shuttled books to membership warehouse clubs
such as BJ's Wholesale Club Inc., and its distribution business,
Publishers Group West, which helped independent publishers get their
books to retail shelves.
href='http://www.signonsandiego.com/news/business/20070406-1141-advancedmarketing-bankruptcy.html'>Read
more .
Approves Citation's Bankruptcy Plan
Less than a month after
filing for chapter 11 protection, Citation Corp. is on its way out of
bankruptcy after a federal judge confirmed the auto-parts maker's
reorganization plan, the Associated Press reported on Friday.
Judge Tamara O.
Mitchell of the U.S. Bankruptcy Court
in
size='3'>Birmingham,
w:st='on'>
size='3'>Ala.
approved Citation's chapter 11 reorganization plan, which the company
had filed with its bankruptcy petition in March. The plan calls for
Citation's lenders, led by JP Morgan Chase, to trade $191 million in
debt for all of the reorganized company's common stock and a new $30
million loan. The lenders have agreed to provide Citation up to $25
million in bankruptcy financing. Claims held by the company's unsecured
creditors totaling $33 million will be reinstated and paid in full in
the ordinary course of business. Citation will give holders of its
preferred stock new Class A warrants and two-thirds of its new Class B
warrants. Owners of common shares, whose holdings will be canceled, will
get the remaining third of Class B warrants.
href='http://biz.yahoo.com/ap/070406/citation_corp_bankruptcy.html?.v=1'>Read
more.
name='6'>Commentary: Turnaround Financiers Looking to Make More
Acquisitions
Proposals from buyout
specialists in recent weeks are striking because they are betting on
companies or industries that appear to have lost the confidence of
public shareholders, according to a commentary today in the
Wall Street
Journal. The recent proposals include Kirk
Kerkorian's offer for Chrysler Group, property magnate Sam Zell buying
newspaper publisher Tribune Co. and Carl Icahn's bids for
size='3'>Florida
builder WCI Communities Inc. and auto supplier Lear Corp. Financial
experts say more such deals may be on the horizon, especially for
retailers and companies suffering from housing-market weakness. These
deals offer a chance for successful restructuring of companies and
industries struggling to meet the challenges of globalization, modern
technology or economic cycles. As private enterprises, they can
undertake union talks and financial restructuring outside the glare of
public scrutiny and without worrying about the impact on small
shareholders.
href='http://online.wsj.com/article/SB117608392004163738.html?mod=home_whats_news_us'>Read
more . (Registration required.)
name='7'>Bankrupt Cosmetics Maven Reaches Deal on
Lawsuit
cosmetics queen Marilyn Miglin reached a settlement of a
lawsuit in
face='Times New Roman' size='3'>Las Vegas
that had forced her to file for bankruptcy protection
from creditors last week, the
size='3'>Chicago Tribune reported on Saturday.
Though terms of the settlement weren't disclosed, Miglin's personal
bankruptcy will be dismissed shortly, her attorney Cornelius Brown said.
Last month, Miglin, the 68-year-old widow of real estate developer Lee
Miglin, lost a lawsuit related to a failed business venture in
size='3'>Las Vegas
resulted in a preliminary $16.8 million judgment against her and others
involved. To protect her assets, which include the cosmetics company
that bears her name and a real-estate firm, Miglin filed for chapter 11
protection from creditors in
w:st='on'>
size='3'>Chicago
problems in
size='3'>Nevada
in 2000, when she invested $2.5 million for 25 percent ownership in
Advanced Medical Products Inc., according to filings in
size='3'>Nevada
court. The company was formed to market an unproven treatment for spider
href='http://www.chicagotribune.com/business/chi-0704060472apr07,0,3731826.story?track=rss'>Read
more.
name='8'>Bankruptcy Court Approves Hancock Plan to Close
Stores
Judge
face='Times New Roman' size='3'>Brendan L. Shannon
size='3'>signed an order Thursday allowing Hancock Fabrics' plan to
close 134 stores, the Associated Press reported yesterday. Great
American, a
w:st='on'>Woodland
Hills
w:st='on'>
size='3'>Calif.
consultant will oversee management of Hancock's closing sales. Hancock
Fabrics, based in Baldwyn, Miss., negotiated terms with Great American
in February, about a month before filing for chapter 11. The court also
approved an agreement between Hancock and Keen Realty LLC of Great Neck,
N.Y., for Keen to oversee management of nonresidential leases and other
properties held by Hancock.
href='http://www.clarionledger.com/apps/pbcs.dll/article?AID=/20070407/NEWS/70407008'>Read
more .
name='9'>Specialty Paper Retailer Files for
Bankruptcy
Paper Zone has filed for
chapter 11 protection on Friday, the Seattle Times
reported on Saturday. The
specialty-paper retailer plans to continue operating 10 Paper Zone
stores —seven in
size='3'>Washington
in
size='3'>—while
shuttering a string of scrapbooking retail sites it ran under the
Memories brand name. The
w:st='on'>
size='3'>Seattle
has $5.46 million in debt, according to legal filings this week. The
largest secured creditor listed is the Seattle Foundation, which
received a contribution pledge of $224,050.
face='Times New Roman' size='3'>Paper Zone reported $21.9 million in
sales last fiscal year, a 38.6 percent jump from the year before. The
company said it has assets worth $3.2 million.
href='http://seattletimes.nwsource.com/html/businesstechnology/2003655650_paperzone07.html?syndication=rss'>Read
more .
name='10'>Dominion Homes Posts 54 Percent Drop in Home Sales for
First Quarter
Dominion Homes Inc.
became the latest home builder to feel the sting of the
size='3'>U.S.
size='3'>housing slump, reporting a 54 percent drop in homes sold during
the first quarter, the
size='3'>Wall Street Journal reported today.
The Dublin, Ohio-based company sold 218 homes in the first quarter, for
a total sales value of $43.5 million, down from 475 homes, or $89.3
million, a year earlier. The housing sector has been struggling with an
inventory glut, a surge in cancellations from jittery buyers and a slump
in demand, forcing most home builders to slash prices and offer other
incentives to spur sales. Dominion Homes delivered 48 percent fewer
homes during the quarter, for a total of 165 homes. The backlog as of
March 31 was 319 contracts, with a sales value of $64.9 million,
compared with 590 contracts, with a sales value of $118.2 million, a
year ago.
href='http://online.wsj.com/article/SB117588650436162420.html?mod=us_business_whats_news'>Read
more . (Registration required.)
TROUBLED
COMPANIES IN THE NEWS
1000’s of companies lose money or
experience some form of difficulty each quarter.
The business news articles below are
taken from the Daily Summary of Troubled & Fast Growing U.S.
Companies and Other Business News published by Bastien Financial
Publications.
To begin receiving the COMPLETE Daily
e-Summary, that emails you information on over 70 such companies each
morning, email
face='Times New Roman'
color='#0000ff'>steve@creditnews.comyour name, company name, address,
phone and fax. We’ll set you up within 24 hours.
Tax Time Special! Now through April 15,
you can receive an annual subscription to the U.S. Business
Journal¹s weekly summary of troubled
w:st='on'>
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Indicate “ABI CODE 27” in your email.
size='3'>Advocat Inc., a
w:st='on'>
size='3'>Brentwood
operator, ended operations at its leased facility in Eureka Springs,
Ar. The
face='Times New Roman' size='3'>Arkansas
facility faced low occupancy rates and had been operating
at a loss.
size='3'>Apex Silver Mines Ltd., Denver, Co.,
restated financial figures for 2005, resulting in a much higher loss
than had earlier been reported. The 2005 loss now comes in at $162
million, more than twice its earlier reported loss. The restatement was
required following a recalculation of the fair value of its open metals
derivative positions. In 2006, Apex lost more than $513
million.
size='3'>Celebrate Express Inc., a
size='3'>Kirkland
w:st='on'>
size='3'>Wa
party products, reported a third quarter net loss of $140,000. Sales
fell 11%–to $16.7 million.
size='3'>Chemtura Cop., Middlebury, Ma.,
announced that it will reduce its payroll by 620 workers (10% of its
workforce), as part of a restructuring program. Chemtura was created two
years ago by the merger between Great Lakes Chemical Corp. and Crompton
Corp.
size='3'>Cutera Inc.’s stock price
plunged 31% after the Brisbane, Ca. laser company warned that earnings
in its first quarter will miss earlier targets. Cutera’s lasers
are used for hair removal and skin treatments.
size='3'>Kroger Co. says it isn’t
interested in going through a leveraged buyout. The firm’s CEO,
David Dillon, appears to be trying to quash rumors of a buyout amid
speculation that private-equity firms are lining up to make buyout
offers. According to some reports, Kroger has private-equity firms
licking their chops, as a number of them have reportedly been taking a
closer look at the
face='Times New Roman'
size='3'>Cincinnati,
Oh.-based supermarket operator as a potential takeover target.
Private-equity companies are apparently thinking that Kroger, with a
market capitalization of about $20 billion, might soon be getting help
from Goldman Sachs Group Inc. to explore leveraged-buyout opportunities.
The company is a strong one, over the past twelve months reporting net
income of $1.1 billion on revenue of $66 billion, and its $7 billion in
outstanding debt is considered to be at a reasonable level given the
size of the firm. It’s not clear, though, that any deal will go
through, particularly since a 40% runup in Kroger’s stock price
over the past year could discourage suitors. Kroger has nearly 2,500
supermarkets.
size='3'>Rocky Mountain News in
size='3'>Denver
w:st='on'>Co.
is offering voluntary-separation packages to fifty
workers in hopes of cutting twenty newsroom jobs.
size='3'>Super Vision International Inc., an
Orlando, Fl. marketer of fiber-optic lighting cables,, reported a fiscal
net loss of $2.2 million, nearly five times its loss in the year-earlier
period. Revenue was down 8%–to $11 million.
size='3'>Tribune Co.’s leading suitor,
Sam Zell, insists his intentions aren’t to break up the Chicago,
Il.-based media giant. The mollifying statement comes after a chat
with
size='3'>Hollywood
on Friday. While the meeting between Messrs. Zell and Geffen was
described as a social one, some observers suspected that more was on the
plate than social niceties since Mr. Geffen has been trying for a year
to somehow pry Tribune’s Los Angeles Times unit away from the
parent company. Worries that Mr. Zell might want to sell off pieces of
Tribune Co. if he buys it stem from the heavy pile of debt the company
would incur through his complex $8.2 billion proposed
buyout.
size='3'>WCI Communities Inc.’s
directors are urging shareholders to a turn down a $22-a-share buyout
offer from investor Carl Icahn, claiming that the bid doesn’t
recognize the value of the company. Nonetheless, some observers
feel that Mr. Icahn’s offer, which values the company at $920
million, won’t be met by bids from other potential suitors because
of worries about the weak condo market in
w:st='on'>
size='3'>Florida
the
face='Times New Roman' size='3'>Bonita
size='3'>Springs
builder of condominiums and single-family homes, has a market value of
just over $900 million and is in need of cash from closing condominiums
in order to pay down debt.